Sims Ltd. · ASX:SGM
Sims — Investor Day (September 2015)
70 slides from Sims's investor day presentation, Sep 9, 2015
Slide 1: Investor Strategy Day
For personal use only Sunset Park, Brooklyn, NY Investor Strategy Day New York, 8 September 2015
Slide 2: Agenda
Agenda For personal use only Strategy Update Streamline Planning & Initiatives Optimise Supplier Relationships Logistics Operational Excellence Product Quality & Services Grow Setting the Stage for Growth Global Electronics Recycling Summary 2
Slide 3: Strategic Update and Next Steps
For personal use only Strategic Update and Next Steps: Galdino Claro, Group CEO New York, 8 September 2015
Slide 4: Clear Five Year Strategic Plan
Clear 5 Year Strategic Plan For personal use only Grow Optimise • Grow market share by leveraging competitive advantages and selective core market acquisitions Streamline Strengthen supplier relationships • Adaptive market positioning to capture new trends across • Exploit local & global logistics m
Slide 5: Project Management Office (PMO)
Project Management Office (PMO) For personal use only Galdino Claro Group CEO & Managing Director North America North America North America Global ANZ Europe Global Fred Knechtel Metals Metals Metals Trade Metals Metals E-Recycling Group CFO West Central East Project Management Office PMO: Central p
Slide 6: Results so far on track
Results so far on track For personal use only >11% Return on 350 Capital 10% 300 Underlying EBIT (A$m) 250 8% Grow Return on Capital 200 5.5% Optimise 6% 4.6% 321 150 Streamline 4% 100 2.3% 142 2% 119 50 67 0 1 0% FY13 FY14 FY15 FY18 Underlying EBIT Return Returnonon Series2 Return Capital onCapital
Slide 7: Encouraging results with more to come
Encouraging results with more to come For personal use only Results so far have been encouraging with five year FY18 targets on track Only two years into five year plan, with much more to be accomplished Further earnings growth expected across: Additional fixed & operational cost reductions Complete
Slide 8: Setting the stage for growth
Setting the stage for growth For personal use only Market Adjacencies • Engage neighbouring markets where Market Position competitive strengths • Identify new growth can be leveraged markets • Position for future market disruption across materials, demographics, & Share Gain technology • Exploit com
Slide 9: Portfolio options for growth
Portfolio options for growth For personal use only Ferrous and non-ferrous metal sales High and profitability constrained by Grow Protect competitive markets Other Continued optimisation in metals recycling may create a stronger Electronics Recycling Market Growth platform for acquisition of Municip
Slide 10: Agenda
Agenda For personal use only Strategy Update Streamline Planning & Initiatives Optimise Supplier Relationships Logistics Operational Excellence Product Quality & Services Grow Setting the Stage for Growth Global Electronics Recycling Summary 10
Slide 11: Streamline: Planning & Initiatives
For personal use only Streamline: Planning & Initiatives Fred Knechtel, Group CFO New York, 8 September 2015
Slide 12: Return on capital focus
Return on capital focus For personal use only Return on Capital 3,500 7% Optimise – Gross Margin Start of 5 year plan Supplier Relationships 3,000 6% Logistics Return on Capital 2,500 5% Operational Excellence A$ million 2,000 4% Product Quality & Services 1,500 3% 1,000 2% Streamline – Operating Co
Slide 13: Strengthening the business model
Strengthening the business model For personal use only Shifting fixed and variable expenses lower Streamline drives fixed cost per tonne DOWN on the cost curve Optimisation drives margin per tonne UP Variablising the fixed cost base to be more flexible in lower volume conditions $ / tonne Equipment
Slide 14: Budgeting & Planning
Budgeting & Planning For personal use only Enhanced analytical framework developed Forecast period to improve budgeting and planning cycle 300 600 Ferrous scrap generation kg per capita Using statistical analysis to better forecast 250 500 and plan for market activity levels 200 400 Addressing areas
Slide 15: North America Central Region streamline initiative
North America - Central Region streamline initiative For personal use only Central Region challenged by high competition with low levels of supply Actions Taken (July 2015): MI Idled Memphis, TN shredder OH IL IN Closed 2 additional facilities Consolidated office support functions TN Further Conside
Slide 16: ANZ Metals - New systems to reduce overhead cost
ANZ Metals - New systems to reduce overhead cost For personal use only ANZ Metals implemented new back-office OCR Workflow technology platform for leaner work Uses Microsoft AX as a financial hub SAI Other linked with SAI operating system AX Enabled optical character recognition technology (OCR) to
Slide 17: Agenda
Agenda For personal use only Strategy Update Streamline Planning & Initiatives Optimise Supplier Relationships Logistics Operational Excellence Product Quality & Services Grow Setting the Stage for Growth Global Electronics Recycling Summary 17
Slide 18: Optimise: Gross margin improvement
Optimise: Gross margin improvement For personal use only Optimise initiatives have driven gross Gross Margin Trend1 margin improvement of $47/t since the start of the strategic plan 700 Start of 5 year plan 150 650 140 A$ margin / tonne Margins expanded through: 600 130 A$ / sales tonne 120 Raw mate
Slide 19: Optimise: Core drivers of profitability
Optimise: Core drivers of profitability For personal use only Supplier Buy the right quality for the right price Reinforce feeder yard networks Relationships Strengthen supplier relationships Optimise transport capabilities Logistics Minimise freight & handling cost Leverage export capacity Scrap Av
Slide 20: Optimise: Supplier Relationships & Logistics
For personal use only Optimise: Supplier Relationships & Logistics Joe Payesko, President North America Metals – East Region New York, 8 September 2015
Slide 21: Supplier Relationships: Improved analysis
Supplier Relationships: Improved analysis For personal use only Top 25 Suppliers Supplier profitability analysis continues to (North America Metals ‘test’ region) drive margin improvement Reports analyse every tonne purchased by profitability, and deliver critical Margin / t feedback to buyers The c
Slide 22: Supplier Relationships: Leveraging Global Trade
Supplier Relationships: Leveraging Global Trade For personal use only 3 4 Intake material is received, Global trade oversees the processed, and loaded into transport and finalisation of bulk freight vessels sale Commercial Buyer Global Trade Network Sales Network 2 The buyer network purchases 1 Glob
Slide 23: Logistics: Maximising low cost freight capacity
Logistics: Maximising low cost freight capacity For personal use only Extensive transportation optionality across Transport cost per ton-mile the North America Metals footprint Increasing utilisation of low cost transport options across rail and barge Reducing internal and external trucking costs th
Slide 24: Logistics: Maximising low cost freight capacity
Logistics: Maximising low cost freight capacity For personal use only Barging from New Haven, CT to Jersey City, NJ is $18 to $22 per tonne less expensive than trucking Shredder & key facility Barge dock Deep water export dock Maximising water based access as a key competitive advantage * Additional
Slide 25: Optimise: Operational Excellence
For personal use only Optimise: Operational Excellence Derek Michalowski, Director – Non-Ferrous Shred Recovery New York, 8 September 2015
Slide 26: Operational Excellence: Increased zorba recovery
Operational Excellence: Increased zorba recovery For personal use only North America Metals Sharing best practice operating principles ‘Zorba’ Recovery Rate has driven a meaningful increase in metal shredding zorba recoveries1 Since the start of the 5 year plan, zorba Zorba recovery as % of infeed r
Slide 27: Operational Excellence: Metal loss monitors
Operational Excellence: Metal loss monitors For personal use only Following successful trials, metal loss monitors have been installed on all downstream plants This new technology can provide data to plant operators to reduce metal loss to the waste stream with minimal investment This technology hel
Slide 28: Operational Excellence: Metal loss monitors
Operational Excellence: Metal loss monitors For personal use only Metal Loss Events Metal Loss Rate Data 1. Q (15:30): “Is something different about the material?” 2. A1 (Supervisor - 16:00): “Nothing – Initial e-mail sent after 3 consecutive metal Response received regarding running 40GT/hr with ve
Slide 29: Operational Excellence: Metal loss monitors
Operational Excellence: Metal loss monitors For personal use only Initial Loss Rate – 120 counts per Final Loss Rate – 10-min interval 75 counts per 10- min interval 38% reduction in metal loss over 2 months 29
Slide 30: Operational Excellence: Wire quality improvements
Operational Excellence: Wire quality improvements For personal use only Recently installed a new technology sensor machine at a downstream non-ferrous recovery plant to improve insulated copper wire (ICW) recoveries and quality In a post-audit analysis, the machine was shown to improve both recoveri
Slide 31: Optimise: Product Quality & Services
For personal use only Optimise: Product Quality & Services Bill Schmiedel, President Global Trade New York, 8 September 2015
Slide 32: Product Quality & Service: Global Trade
Product Quality & Service: Global Trade For personal use only Past Present Previously: Disconnected trading units separated Now: Coherent structure, improved communication flow, by geography and material classification and unified oversight by Global Trade North America Non- Stainless Ferrous Stainl
Slide 33: Product Quality & Service: Global Trade
Product Quality & Service: Global Trade For personal use only Sharing of best practices between Ferrous and Non-Ferrous global trading groups is expected to deliver a number of benefits including: Leveraging of global network across all geographies and products Optimised information flow and timely
Slide 34: Product Quality & Service: Global Trade
Product Quality & Service: Global Trade For personal use only Metal Recycling Operations Global Trade Office Key Ferrous Market Key Non-Ferrous Market Key Ferrous & NF Market Leveraging overlapping ferrous and non-ferrous trade networks 34
Slide 35: Agenda
Agenda For personal use only Strategy Update Streamline Planning & Initiatives Optimise Supplier Relationships Logistics Operational Excellence Product Quality & Services Grow Setting the Stage for Growth Global Electronics Recycling Summary 35
Slide 36: Grow: Setting the stage for Growth
For personal use only Grow: Setting the stage for Growth Galdino Claro, Group CEO New York, 8 September 2015
Slide 37: Setting the stage for growth
Setting the stage for growth For personal use only Market Adjacencies • Engage neighbouring markets where Market Position competitive strengths • Identify new growth can be leveraged markets • Position for future market disruption across materials, demographics, & Share Gain technology • Exploit com
Slide 38: Grow: Market share
Grow: Market share For personal use only Supplier Relationships: Identify the most Product natural suppliers within our operational Quality & Service footprint and winning their business Logistics: Maximise barge, rail, and Operational Excellence trucking capacity to profitably reach material from g
Slide 39: Grow: Market position
Grow: Market position For personal use only Declining steel & increasing alloys & polymers Future material supply likely to be 100% Vehicle content by weight 80% significantly different that present 60% Increasing composition of electronics and 40% 20% alloys in consumer goods & vehicles will 0% pre
Slide 40: Grow: Market adjacencies
Grow: Market adjacencies For personal use only Engage neighbouring markets where competitive strengths can be leveraged These may include: New geographies, materials, or Attractive geographies boarding services Metals current markets or where growth Recycling opportunities exist New materials Electr
Slide 41: Grow: Global Electronics Recycling
For personal use only Grow: Global Electronics Recycling Steve Skurnac, President Global SRS New York, 8 September 2015
Slide 42: Global footprint over countries
Global footprint over 20 countries For personal use only 48 UK UK Operations Operations 9 EU 10 EU 9 US 12 US Operations Operations Operations Operations 3 India Operations 1 UAE Operation 1 Singapore Operation 4 Australia 1 South Operations 1 New Africa Zealand Operation Operation Broadest industry
Slide 43: Best-in-class solutions in core markets
Best-in-class solutions in core markets For personal use only Global E-Recycling Commodity Recycling (WEEE) Business Lines Large volume recycling of material from municipalities, compliance schemes, and equipment producers Commodity Recycling Asset Management Services Manage the data destruction, re
Slide 44: Independently recognised market leader
Independently recognised market leader For personal use only Gartner Magic Quadrant Challengers Leaders for IT Asset Disposition Sims Recycling Solutions Niche Players Visionaries Industry recognised leader Source: Gartner Magic Quadrant for IT Asset Disposition, Worldwide, December 2014 44
Slide 45: Earnings turnaround with attractive growth outlook
Earnings turnaround with attractive growth outlook For personal use only Global E-Recycling A remarkable turnaround from 2 previous Statutory EBIT years of unsustainable losses: 60 42 40 Write offs and impairments in excess of 20 $200 million combined in FY13 & FY14 0 Significant restructuring since
Slide 46: Shifting towards higher value adding services
Shifting towards higher value adding services For personal use only Asset Management Services Reliance on Commodity Recycling A gradual shift to increase service revenues 46
Slide 47: Attractive client focused value proposition
Attractive client focused value proposition For personal use only Global E-Recycling New Value Proposition: Value Proposition Full-service, consultative Asset Management partner Information source for Engineering Global & Consulting strategic customer decisions Footprint Services Advisor & partner t
Slide 48: Committed to retain market leadership
Committed to retain market leadership For personal use only Increasing investment In: Organisational Capital Leverage global footprint & best Information practices Capital Intellectual Capital Upskill employees across disciplines Intellectual Capital Redefine roles Identify high potential employees
Slide 49: A clear plan for delivery
A clear plan for delivery For personal use only 3 4 1 2 Aggressively shift Develop and use Leverage across our sales toward technology global footprint Review operating solutions to service customers that and overhead costs the customer require asset and take action to management achieve immediate s
Slide 50: Agenda
Agenda For personal use only Strategy Update Streamline Planning & Initiatives Optimise Supplier Relationships Logistics Operational Excellence Product Quality & Services Grow Setting the Stage for Growth Global Electronics Recycling Summary 50
Slide 51: Summary
Summary For personal use only Results to date of the strategic plan are encouraging, with five year FY18 targets on track Core objective remains to deliver better than cost of capital returns, even at bottom of the cycle conditions Every business is aligned, collaborating, and contributing to the po
Slide 52: Sims Municipal Recycling
For personal use only Sims Municipal Recycling Tom Outerbridge, General Manager Sims Municipal Recycling New York, 8 September 2015
Slide 53: About Sims Municipal Recycling
About Sims Municipal Recycling For personal use only Recycles Residential & Institutional Material: Source-separated as dual or single-stream Potential development of mixed waste processing Local government contracts (short or long term) Drivers of volume: policy, mandates, goals, landfill diversion
Slide 54: History
History For personal use only Began in 2002 when NYC cancelled the curbside recycling because processing fees were higher than waste export costs. Sims (the Hugo Neu) won short term contracts to restore the curbside program. Subsequently, Sims won a 20-year City contract (10 yr optional extensions)
Slide 55: Safety Performance
Safety Performance For personal use only Safety Statistics Measurement FY12 FY13 FY14 FY15 Headcount 152 138 189 185 LTI # 0 1 1 0 LTIFR 0 0.60 0.47 0 RI # 4 4 5 2 RIFR 2.25 2.98 2.87 0.97 Hazardous ID & NM # 329 513 481 713 Aiming for world class performance 55
Slide 56: Sunset Park Material Recovery Facility (MRF)
Sunset Park Material Recovery Facility (MRF) For personal use only Long-term lease co-terminus with long-term recycling contract 11-Acre City-owned pier with truck, barge, and rail access Shared New York City / Sims Metal Management development costs Approx. 20,000 tpm MGP processing capacity World
Slide 57: Sustainability at Sunset Park
Sustainability at Sunset Park For personal use only Renewable Energy 600 kW Solar Array 100 kW Wind Turbine ~20% of Electricity Demand Planned 650 kW Solar Expansion Marine Habitat/Ecology Reef & Fuzzy Rope Installation On-site stormwater management Sea Level & Storm Surge Increased Building Elevati
Slide 58: NYC Municipal Recycling Infrastructure
NYC Municipal Recycling Infrastructure For personal use only Highly efficient water-based barge transport 58
Slide 59: Transloading Facilities
Transloading Facilities For personal use only SMR Queens SMR Bronx Receiving Facility on Newtown Creek Receiving Facility on Bronx River 6,000 tpm MGP 6,500 tpm MGP 2,500 tpm Paper; increase to 6-7k 10/15 3,500 tpm Paper Served by multiple locations across the city 59
Slide 60: Municipal Recycling at Claremont Terminal, NJ
Municipal Recycling at Claremont Terminal, NJ For personal use only Municipal Recycling at Claremont Municipal Recycling for NYC and NJ curbside material Glass plant for all Sims Municipal Recycling glass processing Leveraging Metals Recycling Capacity Sims Municipal Recycling bulky metal processed
Slide 61: Glass Recycling at Claremont
Glass Recycling at Claremont For personal use only 8,000-10,000 tons per month Clear glass separation with optical sorters Removal of heat-resistant and leaded glass ~1,200 tpm of clear glass sold Mixed colour glass crushed for aggregates Clear Glass for Bottle Manufacturing -3/8” Recycled Glass Agg
Slide 62: FY15 Sales Breakdown
FY15 Sales Breakdown For personal use only Total Sales by Volume (tonnes) Total Sales by Value ($) 4% 3% 8% 8% 13% Paper Plastics 18% 42% Plastics Ferrous Ferrous Non-Ferrous Flint Glass Paper 60% Non-Ferrous 16% Flint Glass 28% Commodity sales represent ~65% of revenues Additional revenue from tip
Slide 63: FY15 Plastic Sales Breakdown
FY15 Plastic Sales Breakdown For personal use only Plastic Sales by Volume (tonnes) Plastic Sales by Value ($) 6% 4% 6% 0% 0% 10% 9% PET HDPE Natural 33% HDPE Natural PET 39% HDPE Color HDPE Color 11% Poly Propolyne PP Poly Propolyne PP Film (bags) 22% Bulky Rigid Bulky Rigid Aseptic Aseptic Film (b
Slide 64: Outlook
Outlook For personal use only NYC Paper Expanding from ~7,500 to +12,000 TPM 10/15 10 year contract with Pratt for 55% of Paper Glass Plant Plastics (PP/PE) recovery Aggregate markets and alternatives NJ 3rd Party Material Project approx. 2,500 tpm in FY16; short term contracts (1-6 months) Chicago
Slide 65: Thank You for Visiting
Thank You for Visiting For personal use only 65
Slide 66: North America Metals – New York City Metro
For personal use only Claremont Terminal, Jersey City. NY North America Metals – New York City Metro Joe Payesko, President North America Metals – East Region New York, 8 September 2015
Slide 67: North America Metals – New York City Metro
North America Metals – New York City Metro For personal use only Shredder & key facility Processing facility Deep water export dock Long Island City, Queens Claremont Terminal Sunset Park, Brooklyn Jersey City, New Jersey Market leader in New York City metro region 67
Slide 68: Long Island City, Queens
Long Island City, Queens For personal use only 3 2 4 1 5 6 7 1) Truck scale 5) Barge (light iron & crushed cars) 2) Material handlers 6) Municipal recycling material 3) Light iron 7) Barge (municipal recycling material) 4) HMS 68
Slide 69: Claremont Terminal - Jersey City, New Jersey
Claremont Terminal - Jersey City, New Jersey For personal use only 12 1 2 7 11 8 4 6 3 10 9 5 1) Main office 5) Shredder 9) Deep water dock 2) Peddler yard 6) Non-ferrous recovery plant 10) Municipal recycling material 3) Truck scale 7) Rail line 11) Municipal recycling plant 4) Stationary shear 8)
Slide 70: Disclaimer
Disclaimer For personal use only The material contained in this document is a presentation of information about the Group’s activities current at the date of the presentation, 8 September 2015. It is provided in summary form and does not purport to be complete. It should be read in conjunction with